Hong Kong is world renowned for its simple and low tax regime, making it one of the most business-friendly jurisdictions in the world. The tax structure of Hong Kong is relatively straightforward compared with some of the more complex systems used in other countries in the world. There are two main revenue legislations in Hong Kong:

• the Inland Revenue Ordinance; and
• the Stamp Duty Ordinance.

The Ordinance is administered by the Commissioner of Inland Revenue. There are three distinct and separate headings under this Ordinance: Profits Tax; Salaries Tax and Property Tax.

Hong Kong has simple taxation system in terms of types of taxes and administrative procedures
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• NO capital gains tax
• NO dividend tax
• NO estate duties
• NO sales taxes and VAT
• NO annual net worth taxes and no accumulated earnings taxes on companies which retain earnings rather than distribute them
• NO tax on bank interest income
• For corporate, only one tax         Profits Tax
  Two-tiered profits tax rates regime: 8.25% on the first HK$2M, 16.5% on the excess of the first HK$2M.
• Territorial Principle, possibility of ZERO tax proper tax planning

Corporations
Year of Assessment		Tax Rate
2018/2019 onwards		8.25% on the first HK$2M; and 16.5% on the excess of the first HK$2M

 

Unincorporated Businesses
Year of Assessment		Tax Rate
2018/2019 onwards		7.5% on the first HK$2M; and 15% on the excess of the first HK$2M

 

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Year of Assessment		Tax Rate
2011/12 Onwards		15%

On Sale or Transfer of Immovable Property in Hong Kong
Amount or value of the consideration (whichever is the higher)		Rates
Exceeds	Does not exceed
	$4,000,000	$100
$4,000,000	$4,323,780	$100 + 20% of excess over $4,000,000
$4,323,780	$4,500,000	1.50%
$4,500,000	$4,935,480	$67,500 + 10% of excess over $4,500,000
$4,935,480	$6,000,000	2.25%
$6,000,000	$6,642,860	$135,000 + 10% of excess over $6,000,000
$6,642,860	$9,000,000	3%
$9,000,000	$10,080,000	$270,000 + 10% of excess over $9,000,000
$10,080,000	$20,000,000	3.75%
$20,000,000	$21,739,120	$750,000 + 10% of excess over $20,000,000
$21,739,120	$100,000,000	4.25%
$100,000,000	$109,574,470	$4,250,000 + 30% of excess over $100,000,000
$109,574,470		6.50%

 

On Lease of Immovable Property in Hong Kong
Term		Rate
Not defined or is uncertain		0.25% x of the yearly or average yearly rent
Exceeds	Does not exceed
	1 year	0.25% x of the total rent payable over the term of the lease
1 year	3 years	0.5% x of the yearly or average yearly rent
3 years		1% x of the yearly or average yearly rent
Key money, construction fee etc. mentioned in the lease		4.25% of the consideration if rent is also payable under the lease. Otherwise, same duty as for a sale of immovable property
Duplicate or counterpart		$5 each

 

On Transfer of Hong Kong Stock
Nature of Document		Rate
Contract Note for sale or purchase of any Hong Kong stock		0.1% of the amount of the consideration or of its value on every sold not and every bought note
Transfer operating as a voluntary disposition inter vivos		$5 + 0.2% of the value of the stock
Transfer of any other kind		$5